When it comes to giving your child a strong financial start, there are several savings and investment options available in the UK. Each has its own benefits, drawbacks, and best uses. Let’s break down the most popular choices so you can decide what’s right for your family.
1. Junior ISA (JISA)
A Junior ISA (JISA) is a tax-free savings or investment account for children. It’s designed to help you (and loved ones) build a pot your child can access when they turn 18.
There are two main types:
Cash JISA
- How it works: Like a regular savings account, but tax-free and locked until your child turns 18.
- Returns: Pays a fixed or variable rate interest rate which is tax-free.
- Risk: No risk to your capital; your child will never get back less than you put in.
- Downside: Interest rates are often lower than inflation, so the “real” value of the money may shrink over time.
Stocks & Shares JISA (what your child’s Mia account is)
- How it works: Money is invested in funds, shares, or other assets – potentially growing more over the long term.
- Returns: The value can go up and down, but historically, investing has outperformed cash savings over longer periods.
- Risk: Investments can fall as well as rise, so you might get back less than you put in.
- Upside: Over the last 20 years, the MSCI World Index (GBP) has delivered an average annual return of about 8%. For example, £1,000 invested for 18 years could grow to around £4,000 (before fees).[1] [2]
Investing puts your capital at risk. The value of investments can go down as well as up, and you may get back less than you put in.
Key facts for both JISA types:
- Available for children under 18 living in the UK.
- Must be opened by the child’s parent or legal guardian.
- Anyone can contribute (up to £9,000 across both the Cash JISA and Stocks & Shared ISA per tax year).
- Money is locked in until your child turns 18, when it becomes theirs.
2. Child Savings Account
A Child Savings Account is a standard savings account offered by banks and building societies.
- How it works: You (or your child) can deposit and withdraw money, usually with no minimum or maximum limits.
- Interest: Returns: Pays a fixed or variable rate interest rate which could be taxable depending on the amount.
- Risk: No risk to your capital.
- Downside: Interest rates are often lower than inflation, so the “real” value of the money may shrink over time.
3. Junior Premium Bonds
Junior Premium Bonds are a government-backed savings product from NS&I (National Savings & Investments).
- How it works: You buy bonds (minimum £25 and up to £50,000 per child), and instead of earning interest, each bond is entered into a monthly prize draw.
- Prizes: Tax-free monthly prizes range from £25 to £1 million. There’s no guaranteed return, but your original investment is always safe.
- Risk: No risk to your capital.
- Downside: No guaranteed interest or growth – your child may win nothing.
Quick Comparison Table
| Account Type | Growth Potential | Risk Level | Tax-Free? | Access Age | Max Annual Contribution | Who Can Contribute? |
| Cash JISA | Low | None | Yes | 18 | £9,000 (total JISAs) | Anyone |
| Stocks & Shares JISA | Medium–High | Yes | Yes | 18 | £9,000 (total JISAs) | Anyone |
| Child Savings Account | Low | None | No* | Varies (often 7+) | Varies | Anyone |
| Junior Premium Bonds | None–Prize-based | None | Yes | 16 | £50,000 | Parents/Guardians |
*Interest on child savings accounts may be taxable if it exceeds certain limits.
Which Account Is Right for Your Child?
There’s no single “best” option – just the one that matches your goals, your comfort with risk, and your time horizon. Some families prefer the safety of cash accounts, others want the long-term growth potential of investments and some enjoy the excitement of Premium Bonds.
What matters most is taking the first step. Every pound you save or invest today can make a meaningful difference in your child’s future.
Want help deciding which option suits your family best?
Read our next article: How to Choose the Most Suitable Savings or Investment Account for Your Child for practical tips on matching your choice to the goal for your child.
If you’re not sure whether an investment is right for you, it’s best to speak to a qualified financial adviser.
Investing puts your capital at risk. The value of investments can go down as well as up, and you may get back less than you put in. If you’re not sure whether an investment is right for you, it’s best to speak to a qualified financial adviser.
Mia Wealth Limited (Mia Wealth) is an appointed representative of RiskSave Technologies Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 775330). Mia Wealth is a company registered in England and Wales (No. 15818371). Mia Wealth can be found on the Financial Conduct Authority Financial Services register under FRN 1033918. Our address is Fairbourne Drive, Atterbury Lakes, Milton Keynes, England, MK10 9RG.
